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buffalonate (75.28)

November 2011



Congress needs a financial control board

November 21, 2011 – Comments (5)

Does anyone really believe that our politicians will ever get our deficit under control.  Our only way out of our fiscal mess it to take it out of the hands of the politicians.  Politicians don't have the balls to make tough decisions.  They only care about not making their core constituency mad so they can get re-elected.  What we desperately need is a financial control board that is filled with non-politicians to balance the budget.  The City of Buffalo and the surrounding county of Erie County both were nearly bankrupt a few years ago.  The state set up a financial control board for each of them.  The control boards were filled up with non-politicians and made the tough choices.  Now both governments are solvent and have money set aside for a rainy day.  We need a constitutional amendment that will allow the federal government to do the same thing.  This constitutional amendment would put a financial control board in charge of our budget process for the next 10 years or so.  If you filled the financial control board with a combination of former politicians and budget experts our budget problems could be solved very easily.  I see this as the only realistic option for saving our country from certain doom.   [more]



Italy's Austerity Package is a Joke!

November 11, 2011 – Comments (6)

The markets went up big again today after the news that Italy passed an austerity package and economics reforms.  You realize that this rally was false enthusiasm when you look closer at the details.  They agreed to increase the retirement age 2 years many years from now.  They agreed to sell off about 13 billion worth of real estate and to sell off some government owned enterprises over the next 3 years.  Wow that is a decent gesture but it does nothing about their deficit now.  Italy's bond yields skyrocketed over the last week or so because they have 120% debt to GDP and no plans on how to balance the budget.  The only way Italy can get out of their crisis is to balance the budget now and not try to rely on half baked economic reforms to stimulate the economy.  The ECB has stabilized Italy's bond yields by buying bonds but they also stated that they can only legally do that for a short time and they don't have enough funds to handle a large bailout anyways.  I went short again because there is no solution to Italy's problems on the horizon.  I am going short again.   [more]



Is Italy Default Inevitable?

November 08, 2011 – Comments (11)

I just sold all of my stocks today and decided to go short.  Italy's debt is 120% of GDP and their bond yields just keep rising and are into junk bond territory now.  THE ECB said today that they can't print money so when Italy defaults how are they going to recapitalize the banks again?  If Italy balances their budget would that help or are they in a death spiral?  The way their bond yields are rising I vote death spiral.    [more]

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